Co-ops 101 An Introduction to Cooperatives Cooperative Information Report 55 United States Department of Agriculture CI This report provides a comprehensive summary of basic informa- tion on the cooperative way of organizing and operating a business. It covers the nature and extent of the use of cooperatives, compares cooperatives to other business structures, explains the roles vari- ous people play in a cooperative, and discusses equity accumulation and income taxation. The purpose is to make available, in a single report, the information someone would need to acquire a general understanding of how cooperatives function. Keywords: Cooperative, Business, Finance, Structure, Tax Co-ops 101: An Introduction to Cooperatives Donald A. Frederick wrote this report in 1997 and revised it in 2005. This latest revision was completed by James J. Wadsworth and E. Eldon Eversull. Cooperative Information Report 55 April 1997 Revised November 2012 Publications and information are also available on the RBS web- site: http://www.rurdev.usda.gov/rbs/pub/NEWPUB.htm Email:
[email protected] for more information. The mention of brand-names, trademarks, and company names in this publication is for illustrative purposes only, and in no way con- stitutes endorsement of any commercial enterprise or product. Preface Welcome to the dynamic world of cooperation—people working together to solve common problems and seize exciting opportuni- ties. Cooperatives are business entities that people use to provide themselves with goods and services. This booklet introduces you to the attributes that distinguish a cooperative from other ways to organize and conduct a business. Its purpose is to help you understand what makes a cooperative unique.